A personal loan is an installment loan that can help borrowers meet a wide range of goals, including consolidating debt and covering big purchases. When you take out a personal loan, you’ll receive a lump sum that you’ll pay back in fixed monthly payments, over the course of a loan term that you choose.

Use the personal loan calculator above to see how much you’d pay, per month and overall, which will help you compare your options.

How To Use the Personal Loan Calculator

Our loan calculator can give you insight into what your monthly loan payments could look like. Here’s how to use it:

  1. Enter your loan amount. Most lenders offer personal loans between $1,000 and $50,000, although some loans are available up to $100,000 or more if you have excellent credit. If you’ve accepted or pre-qualified for a personal loan, enter that loan amount. Otherwise, enter the loan amount you’d like to borrow. 
  2. Select your loan terms. Your loan terms dictate your monthly payment amount. Longer terms spread out your payments, resulting in lower monthly payments but you’ll pay more in interest. Shorter terms have the opposite effect. Enter your expected or pre-qualified personal loan terms into the calculator. 
  3. Enter your interest rate. Next, enter your loan’s interest rate to determine your payment details. Most personal loan rates range between 7% and 36%, depending on your credit score.
  4. Review your payment details. Once your information is filled in, click the calculate button and review your monthly payment estimate on the left side. You can also review your total interest paid, total principal paid and an amortization chart that breaks down your payments. 

How To Apply for a Personal Loan

While the exact application process may vary depending on your lender, you can follow these general guidelines to apply for a personal loan:

  1. Check your credit score. First, check your credit score through a website that offers free scores or your credit card provider. This will help you understand your creditworthiness and qualification chances. We recommend a score of at least 610; however, a score of at least 720 will yield the most favorable terms.
  2. If necessary, take steps to improve your credit score. If your score falls below 610 or you want to boost it to receive the most favorable terms, take time to improve your score, such as lowering your credit usage or paying off unpaid debts.
  3. Determine how much you need to borrow. Calculate how much money you want to borrow. Keep in mind, you’ll receive your funds as a lump sum and have to pay interest on the entire amount—so only borrow what you need.
  4. Shop around for the best terms and interest rates. Many of the best personal loan lenders will let you pre-qualify before applying, which lets you see the terms you would receive without a hard credit inquiry or damaging your credit score.
  5. Submit a formal application and await a lending decision. Once you find a lender that offers you the best terms, apply online or in person. Depending on the lender, this process can take a few hours to a few days.
  6. Repay your loan. Once you receive the funds, your repayment period will begin. Setting an autopay is a handy way to never miss a payment. If you decide you want to pay off your loan early, be sure to check if your lender charges a prepayment penalty.

What Is a Good Interest Rate on a Personal Loan?

A good interest rate on a personal loan is one that’s lower than the national average, which is about 15%. However, the rate you’ll receive heavily depends on your credit score, income and overall creditworthiness as a potential borrower. To receive the most favorable interest rate, be sure to maintain a good-to-excellent credit score of at least 720, have consistent income and reduce any unpaid debts.

Personal Loan Alternatives

Personal loans aren’t right for everyone. If it doesn’t feel like the right financial decision for you or you don’t qualify, consider personal loan alternatives including:

  • Savings. You can avoid fees and interest if you’re able to cover your expenses with savings. Keep in mind, taking money from a qualified retirement account before the designated retirement age often includes an early withdrawal penalty. So this option should be avoided when possible.
  • Credit card. Credit cards typically have higher interest rates than personal loans but may be easier to qualify for if you have damaged credit. However, if you have a strong credit score, you may be able to qualify for an interest-free financing credit card, which can save you money on interest payments.
  • Personal line of credit. Unlike a personal loan, which you receive as a lump-sum amount, a line of credit lets you access funds up to a certain limit on an as-needed basis; you will only pay interest on the amount you borrow. This makes a line of credit an excellent option for projects or events where expenses will be spread over several months or years.
  • Home equity loan or line of credit. Home equity lines of credit (HELOCs) and home equity loans are financing options that the equity in your home secures. If you’re considering a loan that’s secured by your home, be sure you understand the differences between HELOCs and home equity loans.

Personal Loan FAQs 

What can I use a personal loan for?

Personal loans are very flexible. Common reasons to apply for a personal loan include consolidating multiple debts into one; paying for home improvements or a major life event, like a move; or covering emergency expenses.

While it’s possible to use a personal loan to finance nearly any purchase, student loan and auto loan interest rates are typically lower than personal loan rates. So college costs and car financing may not be wise uses for a personal loan.

How to get a personal loan with bad credit?

If you have fair or bad credit (below 670), you’ll need to rely on fair credit personal loans or bad credit loans. While most lenders require you to have good credit to qualify for a loan, some lenders offer loans with minimum credit score requirements as low as 580. Before applying, take the necessary steps to improve your credit score to ensure you get the best terms possible.

How long are personal loan terms?

Personal loan terms typically last from one to seven years. The shorter the term you choose, the less interest you’ll pay overall. Opt for a term that will provide a monthly payment you can afford but that won’t significantly add to the cost of your purchase.

How long does it take to get a personal loan?

When you apply for a personal loan, you’ll typically receive a decision within a couple of hours to a few days, depending on your lender. Online lenders are usually able to provide prompt decisions while banks take longer to process applications. If your lender or bank needs more documentation, this may slow the process down, and the turnaround time will become partially dependent on how quickly you can get them the documents.

Where can I get a personal loan?

Personal loans are available from traditional lenders, including banks and credit unions, in addition to online lenders and peer-to-peer lending platforms. When comparing personal loan offers, check not only the APR you qualify for, but the fees you’ll be charged and the options available to you if you experience financial hardship and have trouble making payments.